Company Quick10K Filing
Quick10K
Cumulus Media
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-05-05 Quarter: 2016-05-05
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-09-26 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-08-08 Earnings, Exhibits
8-K 2019-06-26 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-06-11 Other Events, Exhibits
8-K 2019-05-30 Other Events
8-K 2019-05-09 Earnings, Exhibits
8-K 2019-04-30 Shareholder Vote
8-K 2019-03-18 Earnings, Exhibits
8-K 2019-02-26 Regulation FD, Exhibits
8-K 2019-02-25 Earnings, Exhibits
8-K 2019-02-13 Regulation FD, Other Events, Exhibits
8-K 2018-11-13 Earnings, Exhibits
8-K 2018-08-20 Earnings, Exhibits
8-K 2018-07-27 Earnings, Regulation FD, Exhibits
8-K 2018-06-04 Enter Agreement, Leave Agreement, Off-BS Arrangement, Sale of Shares, Shareholder Rights, Control, Officers, Amend Bylaw, Exhibits
8-K 2018-03-28 Earnings, Exhibits
8-K 2018-02-01 Officers, Exhibits
SIRI Sirius XM 28,611
SPOT Spotify 24,962
CBS CBS 15,694
NXST Nexstar Media Group 4,333
P Pandora 2,085
GTN Gray Television 1,408
SSP EW Scripps 1,000
TSQ Townsquare Media 166
BBGI Beasley Broadcast Group 89
TV Grupo Televisa 0
CMLS 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 cmls20190630-exx311.htm
EX-31.2 cmls20190630-exx312.htm
EX-32.1 cmls20190630-exx321.htm

Cumulus Media Earnings 2019-06-30

CMLS 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 cmls-20190630x10q.htm 10-Q Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 000-24525
cumulusmediahorizontal2a04.jpg
 
 
Cumulus Media Inc.
(Exact Name of Registrant as Specified in its Charter)
 
 
 
Delaware
 
82-5134717
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
3280 Peachtree Road, NW Suite 2200,
Atlanta, GA
 
30305
(Address of Principal Executive Offices)
 
(ZIP Code)
(404) 949-0700
(Registrant’s telephone number, including area code)
 
 
Securities registered pursuant to Section 12(b) of the Act:
Class A common stock, par value $0.0000001 per share
CMLS
Nasdaq Global Market
Title of each class
Trading Symbol(s)
Name of each exchange on which registered

 




Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
 
¨
  
Accelerated filer
  
ý
 
 
 
 
Non-accelerated filer
 
¨ 
  
Smaller reporting company
 
ý
 
 
 
 
Emerging growth company
 
¨
If an emerging company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  ý    No  ¨
As of August 1, 2019, the registrant had 17,029,502 outstanding shares of common stock consisting of: (i) 14,352,052 shares of Class A common stock; (ii) 2,677,450 shares of Class B common stock in addition to 2,742,416 Series 1 warrants and 375,885 Series 2 warrants.



CUMULUS MEDIA INC.
INDEX
 
 
 

 


2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
 
Successor Company
 
June 30, 2019
 
 
December 31, 2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
$
20,500

 
 
$
27,584

Restricted cash
2,466

 
 
2,454

Accounts receivable, less allowance for doubtful accounts of $3,872 and $5,483 at June 30, 2019 and December 31, 2018, respectively
232,787

 
 
250,111

Trade receivable
4,975

 
 
3,390

Assets held for sale
123,453

 
 
80,000

Prepaid expenses and other current assets
30,685

 
 
31,452

Total current assets
414,866

 
 
394,991

Property and equipment, net
227,227

 
 
235,898

Operating lease right-of-use assets
148,493

 
 

Broadcast licenses
848,876

 
 
935,652

Other intangible assets, net
174,585

 
 
193,535

Other assets
12,301

 
 
15,076

Total assets
$
1,826,348

 
 
$
1,775,152

Liabilities and Stockholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued expenses
$
97,804

 
 
$
101,320

Current portion of operating lease liabilities
34,172

 
 

Trade payable
2,578

 
 
2,578

Current portion of term loan
13,000

 
 
13,000

Total current liabilities
147,554

 
 
116,898

Term loan
590,738

 
 
1,230,299

6.75% senior notes, net of debt issuance costs of $7,332 at June 30, 2019
492,668

 
 

Operating lease liabilities
115,183

 
 

Other liabilities
25,797

 
 
25,742

Deferred income taxes
20,109

 
 
12,384

Total liabilities
1,392,049

 
 
1,385,323

Commitments and contingencies (Note 14)

 
 

Stockholders’ equity:
 
 
 
 
Class A common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 14,363,242 and 12,995,080 shares issued;14,328,538 and 12,995,080 shares outstanding at June 30, 2019 and December 31, 2018, respectively

 
 

Class B common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 2,696,853 and 3,560,604 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 
 

Treasury stock, at cost, 67,833 shares at June 30, 2019
(1,156
)
 
 

Additional paid-in-capital
330,718

 
 
328,404

Retained earnings
104,737

 
 
61,425

Total stockholders’ equity
434,299

 
 
389,829

Total liabilities and stockholders’ equity
$
1,826,348

 
 
$
1,775,152

See accompanying notes to the unaudited condensed consolidated financial statements.

3


CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except for share and per share data)
(Unaudited)
 
Successor Company
 
 
Predecessor Company
 
Three Months Ended June 30,
 
Period from June 4, 2018 through June 30,
 
 
Period from April 1, 2018 through June 3,
 
2019
 
2018
 
 
2018
Net revenue
$
279,673

 
$
95,004

 
 
$
190,245

Operating expenses:
 
 

 
 
 
Content costs
93,844

 
28,970

 
 
61,019

Selling, general and administrative expenses
115,817

 
37,434

 
 
83,195

Depreciation and amortization
13,545

 
4,379

 
 
10,065

Local marketing agreement fees
438

 
358

 
 
702

Corporate expenses (including stock-based compensation expense of $1,106, $652 and $65, respectively, and restructuring costs of $13,024, $6,941 and $734 respectively)
22,675

 
10,125

 
 
6,682

(Gain) loss on sale or disposal of assets or stations
(47,750
)
 

 
 
147

Total operating expenses
198,569

 
81,266

 
 
161,810

Operating income
81,104

 
13,738

 
 
28,435

Non-operating (expense) income:
 
 

 
 
 
Reorganization items, net

 

 
 
496,368

Interest expense
(21,191
)
 
(6,176
)
 
 
(132
)
Interest income
8

 
4

 
 
21

Other (expense) income, net
(34
)
 
20

 
 
(276
)
Total non-operating (expense) income, net
(21,217
)
 
(6,152
)
 
 
495,981

Income before income tax (expense) benefit
59,887

 
7,586

 
 
524,416

Income tax (expense) benefit
(17,026
)
 
(2,606
)
 
 
176,741

Net income
$
42,861

 
$
4,980

 
 
$
701,157

Basic and diluted earnings per common share (see Note 12, “Earnings Per Share”):
 
 

 
 
 
Basic: Earnings per share
$
2.13

 
$
0.25

 
 
$
23.90

Diluted: Earnings per share
$
2.11

 
$
0.25

 
 
$
23.90

Weighted average basic common shares outstanding
20,125,419

 
20,004,736

 
 
29,338,329

Weighted average diluted common shares outstanding
20,317,328

 
20,300,025

 
 
29,338,329




4


 
Successor Company
 
 
Predecessor Company
 
Six Months Ended June 30,
 
Period from June 4, 2018 through June 30,
 
 
Period from January 1, 2018 through June 3,
 
2019
 
2018
 
 
2018
Net revenue
$
547,169

 
$
95,004

 
 
$
453,924

Operating expenses:
 
 
 
 
 
 
Content costs
197,596

 
28,970

 
 
163,885

Selling, general and administrative expenses
229,320

 
37,434

 
 
195,278

Depreciation and amortization
28,135

 
4,379

 
 
22,046

Local marketing agreement fees
1,481

 
358

 
 
1,809

Corporate expenses (including stock-based compensation expense of $2,314, $652 and $231, respectively and restructuring costs of $15,801, $6,941 and $2,455 respectively)
35,192

 
10,125

 
 
17,169

(Gain) loss on sale or disposal of assets or stations
(47,724
)
 

 
 
158

Total operating expenses
444,000

 
81,266

 
 
400,345

Operating income
103,169

 
13,738

 
 
53,579

Non-operating (expense) income:
 
 
 
 
 
 
Reorganization items, net

 

 
 
466,201

Interest expense
(43,347
)
 
(6,176
)
 
 
(260
)
Interest income
12

 
4

 
 
50

Gain on early extinguishment of debt
381

 

 
 

Other (expense) income, net
(62
)
 
20

 
 
(273
)
Total non-operating (expense) income, net
(43,016
)
 
(6,152
)
 
 
465,718

Income before income tax (expense) benefit
60,153

 
7,586

 
 
519,297

Income tax (expense) benefit
(16,841
)
 
(2,606
)
 
 
176,859

Net income
$
43,312

 
$
4,980

 
 
$
696,156

Basic and diluted earnings per common share (see Note 12, “Earnings Per Share”):
 
 
 
 
 
 
Basic: Earnings per share
$
2.16

 
$
0.25

 
 
$
23.73

Diluted: Earnings per share
$
2.14

 
$
0.25

 
 
$
23.73

Weighted average basic common shares outstanding
20,091,568

 
20,004,736

 
 
29,338,329

Weighted average diluted common shares outstanding
20,268,393

 
20,300,025

 
 
29,338,329


See accompanying notes to the unaudited condensed consolidated financial statements.

5


CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands)
(Unaudited)
For Periods March 31, 2018 (Predecessor Company) through June 3, 2018 (Predecessor Company) and June 4, 2018 (Successor Company)
through June 30, 2018 (Successor Company)
 
Class A
Common Stock
 
Class B
Common Stock
 
Class C Common Stock
 
Treasury
Stock
 
 
 
 
 
 
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Value
 
Additional
Paid-In
Capital
 
Retained Earnings
 
Total
Balance at March 31, 2018 (Predecessor)
32,031,054

 
$
320

 

 

 
80,609

 
$
1

 
2,806,187

 
$
(229,310
)
 
$
1,626,594

 
$
(2,098,555
)
 
$
(700,950
)
Net loss

 
 
 

 

 

 

 

 

 

 
(38,999
)
 
(38,999
)
Other

 
 
 

 

 

 

 

 

 
108

 
 
 
108

Stock-based compensation expense

 
 
 

 

 

 

 

 

 
204

 
 
 
204

Balance at June 3, 2018 (Predecessor)
32,031,054

 
$
320

 

 
$

 
80,609

 
$
1

 
2,806,187

 
$
(229,310
)
 
$
1,626,906

 
$
(2,137,554
)
 
$
(739,637
)
Implementation of Plan and Application of Fresh Start Accounting:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Cancellation of Predecessor equity
(32,031,054
)
 
$
(320
)
 

 
$

 
(80,609
)
 
$
(1
)
 
(2,806,187
)
 
$
229,310

 
$
(1,626,906
)
 
$

 
$
(1,397,917
)
Elimination of accumulated deficit

 

 

 

 

 

 

 

 

 
2,137,554

 
2,137,554

Issuance of Successor common stock
11,052,211

 

 
5,218,209

 

 

 

 

 

 
264,394

 

 
264,394

Issuance of Successor warrants

 

 

 

 

 

 

 

 
60,606

 

 
60,606

Balance at June 4, 2018 (Successor)
11,052,211

 
$

 
5,218,209

 
$

 

 
$

 

 
$

 
$
325,000

 
$

 
$
325,000

Net income

 

 

 

 

 

 

 

 

 
4,980

 
4,980

Stock-based compensation expense

 

 

 

 

 

 

 

 
652

 

 
652

Conversion of Class B common stock
1,344,184

 

 
(1,344,184
)
 

 

 

 

 

 

 

 

Exercise of warrants

 

 
34,964

 

 

 

 

 

 

 

 

Balance at June 30, 2018 (Successor)
12,396,395

 
$

 
3,908,989

 
$

 

 
$

 

 
$

 
$
325,652

 
$
4,980

 
$
330,632



6


For Periods December 31, 2017 (Predecessor Company) through June 3, 2018 (Predecessor Company) and June 4, 2018 (Successor Company)
 through June 30, 2018 (Successor Company)
 
Class A
Common Stock
 
Class B Common Stock
 
Class C Common Stock
 
Treasury
Stock
 
 
 
 
 
 
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Value
 
Additional
Paid-In
Capital
 
Retained Earnings
 
Total
Balance at December 31, 2017 (Predecessor)
32,031,054

 
$
320

 

 
$

 
80,609

 
$
1

 
2,806,187

 
$
(229,310
)
 
$
1,626,428

 
$
(2,093,554
)
 
$
(696,115
)
Net loss

 

 
 
 
 
 

 

 

 

 

 
(44,000
)
 
(44,000
)
Other

 

 

 

 

 

 

 

 
247

 

 
247

Stock-based compensation expense

 

 
 
 
 
 

 

 

 

 
231

 

 
231

Balance at June 3, 2018 (Predecessor)
32,031,054

 
$
320

 

 
$

 
80,609

 
$
1

 
2,806,187

 
$
(229,310
)
 
$
1,626,906

 
$
(2,137,554
)
 
$
(739,637
)
Implementation of Plan and Application of Fresh Start Accounting:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cancellation of Predecessor equity
(32,031,054
)
 
$
(320
)
 

 
$

 
(80,609
)
 
$
(1
)
 
(2,806,187
)
 
$
229,310

 
$
(1,626,906
)
 
$

 
$
(1,397,917
)
Elimination of accumulated deficit

 

 

 

 

 

 

 

 

 
2,137,554

 
2,137,554

Issuance of Successor common stock
11,052,211

 

 
5,218,209

 

 

 

 

 

 
264,394

 

 
264,394

Issuance of Successor warrants

 

 

 

 

 

 

 

 
60,606

 

 
60,606

Balance at June 4, 2018 (Successor)
11,052,211

 
$

 
5,218,209

 
$

 

 
$

 

 
$

 
$
325,000

 
$

 
$
325,000

Net income

 

 

 

 

 

 

 

 

 
4,980

 
$
4,980

Stock-based compensation expense

 

 

 

 

 

 

 

 
652

 

 
652

Conversion of Class B common stock
1,344,184

 

 
(1,344,184
)
 

 

 

 

 

 

 

 

Exercise of warrants

 

 
34,964

 

 

 

 

 

 

 

 

Balance at June 30, 2018 (Successor)
12,396,395

 
$

 
3,908,989

 
$

 

 
$

 

 
$

 
$
325,652

 
$
4,980

 
$
330,632











7


For The Three Months Ended June 30, 2019 (Successor Company)
 
Class A
Common Stock
 
Class B Common Stock
 
Treasury
Stock
 
 
 
 
 
 
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Value
 
Additional
Paid-In
Capital
 
Retained Earnings
 
Total
Balance at March 31, 2019 (Successor)
13,992,145

 
$

 
2,812,006

 
$

 
34,704

 
$
(633
)
 
$
329,612

 
$
61,876

 
$
390,855

Net income

 

 

 

 

 

 

 
42,861

 
$
42,861

Shares returned in lieu of tax payments

 

 

 

 
33,129

 
(523
)
 

 

 
(523
)
Conversion of Class B common stock
115,153

 

 
(115,153
)
 

 

 

 

 

 

Exercise of warrants
170,659

 

 

 

 

 

 

 

 

Issuance of common stock
50,581

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 
1,106

 

 
1,106

Balance at June 30, 2019 (Successor)
14,328,538

 
$

 
2,696,853

 
$

 
67,833

 
$
(1,156
)
 
$
330,718

 
$
104,737

 
$
434,299


For The Six Months Ended June 30, 2019 (Successor Company)
 
Class A
Common Stock
 
Class B Common Stock
 
Treasury
Stock
 
 
 
 
 
 
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Par
Value
 
Number of
Shares
 
Value
 
Additional
Paid-In
Capital
 
Retained Earnings
 
Total
Balance at December 31, 2018 (Successor)
12,995,080

 
$

 
3,560,604

 
$

 

 
$

 
$
328,404

 
$
61,425

 
$
389,829

Net income

 

 

 

 

 

 

 
43,312

 
43,312

Shares returned in lieu of tax payments

 

 

 

 
67,833

 
(1,156
)
 

 

 
(1,156
)
Conversion of Class B common stock
866,786

 

 
(866,786
)
 

 

 

 

 

 

Exercise of warrants
347,845

 

 

 

 

 

 

 

 

Issuance of common stock
118,827

 

 
3,035

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 
2,314

 

 
2,314

Balance at June 30, 2019 (Successor)
14,328,538

 
$

 
2,696,853

 
$

 
67,833

 
$
(1,156
)
 
$
330,718

 
$
104,737

 
$
434,299

See accompanying notes to the unaudited condensed consolidated financial statements.

8


CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
Successor Company
 
 
Predecessor Company
 
Six Months Ended June 30,
 
Period from June 4, 2018 through June 30,


Period from January 1, 2018 through June 3,
 
2019
 
2018
 
 
2018
Cash flows from operating activities:
 
 
 
 
 
 
Net income
$
43,312

 
$
4,980

 
 
$
696,156

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Depreciation and amortization
28,135

 
4,379

 
 
22,046

Amortization of right of use assets
11,931

 

 
 

Amortization of debt issuance costs/discounts
136

 

 
 

Provision for doubtful accounts
618

 
322

 
 
5,993

(Gain) loss on sale or disposal of assets or stations
(47,724
)
 

 
 
158

  Non-cash reorganization items, net

 

 
 
(523,651
)
Gain on early extinguishment of debt
(381
)
 

 
 

Deferred income taxes
7,725

 
2,606

 
 
(179,455
)
Stock-based compensation expense
2,314

 
652

 
 
231

Changes in assets and liabilities:
 
 
 
 
 
 
Accounts receivable
16,704

 
(16,363
)
 
 
12,697

Trade receivable
(1,585
)
 
26

 
 
(997
)
Prepaid expenses and other current assets
424

 
(241
)
 
 
(5,831
)
Operating leases
3,839

 

 
 

Assets held for sale
29

 

 
 

Other assets
2,778

 
(156
)
 
 
(436
)
Accounts payable and accrued expenses
(17,836
)
 
2,065

 
 
7,777

Trade payable
78

 
13

 
 
190

Other liabilities
(1,543
)
 
5

 
 
(5,746
)
Net cash provided by (used in) operating activities
48,954

 
(1,712
)
 
 
29,132

Cash flows from investing activities:
 
 
 
 
 
 
Proceeds from sale of assets or stations
103,519

 

 
 

Acquisition

 
(18,000
)
 
 

Capital expenditures
(10,715
)
 
(1,969
)
 
 
(14,019
)
Net cash provided by (used in) investing activities
92,804

 
(19,969
)
 
 
(14,019
)
Cash flows from financing activities:
 
 
 
 
 
 
Adequate protection payments on term loan

 

 
 
(37,802
)
Repayment of borrowings under term loan
(639,180
)
 

 
 

Proceeds from issuance of 6.75% senior notes
500,000

 

 
 

Financing costs
(7,675
)
 

 
 
(850
)
Shares returned in lieu of tax payments
(1,156
)
 

 
 

Repayments of financing lease obligations
(819
)
 

 
 

Net cash used in financing activities
(148,830
)
 

 
 
(38,652
)
Decrease in cash and cash equivalents and restricted cash
(7,072
)
 
(21,681
)
 
 
(23,539
)
Cash and cash equivalents and restricted cash at beginning of period
30,038

 
88,351

 
 
111,890

Cash and cash equivalents and restricted cash at end of period
$
22,966

 
$
66,670

 
 
$
88,351


9


See accompanying notes to the unaudited condensed consolidated financial statements.


10



1. Nature of Business, Interim Financial Data and Basis of Presentation

Cumulus Media Inc. (and its consolidated subsidiaries, except as the context may otherwise require, “CUMULUS MEDIA,” “we,” “us,” “our,” or the “Company”) is a Delaware corporation, organized in 2018, and successor to a Delaware corporation with the same name that had been organized in 2002.
Nature of Business

CUMULUS MEDIA is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month - wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through on-air, digital, mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live event experiences.    

Basis of Presentation
As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption In re Cumulus Media Inc., et al, Case No. 17-13381. On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open until its estate has been fully administered including resolving outstanding claims and the Bankruptcy Court enters an order closing its case.
In connection with its emergence, Old Cumulus implemented a series of internal reorganization transactions authorized by the Plan pursuant to which it transferred substantially all of its remaining assets to an indirectly wholly owned subsidiary of reorganized Cumulus Media Inc. (formerly known as CM Emergence Newco Inc.), a Delaware corporation (“CUMULUS MEDIA” or the “Company”), prior to winding down its business. References to “Successor” or “Successor Company” relate to CUMULUS MEDIA on and subsequent to June 4, 2018. References to “Predecessor”, “Predecessor Company” or “Old Cumulus” refer to Cumulus Media Inc. prior to June 4, 2018.
Upon emergence from Chapter 11 on the Effective Date, the Company applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing its consolidated financial statements. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and consequently the consolidated financial statements on and after June 4, 2018 generally are not comparable to the consolidated financial statements prior to that date.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.










11


Interim Financial Data
In the opinion of management, the Company's unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. The results for the interim periods are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Revision of Previously Issued Financial Statements

During the third quarter of 2018, the Company determined that it had an error in the classification of certain content related costs in the Condensed Consolidated Statement of Operations disclosed in previous periods. The Company should have presented the amounts within Content costs rather than within Selling, general and administrative expenses. In the accompanying Condensed Consolidated Statement of Operations, the previous period has been revised to correct this misclassification. This reclassification resulted in an increase in Content costs of $4.2 million and a corresponding decrease in Selling, general and administrative expenses for the Predecessor Company period January 1, 2018 through June 3, 2018. The correction was not material to the consolidated financial statements.
    
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including significant estimates related to revenue recognition, bad debts, intangible assets, income taxes, stock-based compensation, contingencies, litigation, valuation assumptions for impairment analysis, certain expense accruals, leases and, if applicable, purchase price allocations. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual amounts and results may differ materially from these estimates.

Comprehensive Income (Loss)
Comprehensive income (loss) includes net income (loss) and certain items that are excluded from net income (loss) and recorded as a separate component of stockholders' equity (deficit). During the three and six months ended June 30, 2019 (Successor Company) and periods from January 1, 2018 through June 3, 2018 (Predecessor Company), and June 4, 2018 through June 30, 2018 (Successor Company), the Company had no items of other comprehensive income (loss) and, therefore, comprehensive income (loss) does not differ from reported net income (loss).

Assets Held for Sale
During the year ended December 31, 2015, the Company entered into an agreement to sell certain land in the Company's Washington, DC market ("DC Land") to a third party. The sale is subject to various conditions and approvals, including, without limitation, the receipt by the buyer of certain required permits and approvals for its expected use of the land. There can be no assurance that such sale will be completed in a timely manner, at the original agreed price, or at all.
On April 15, 2019, the Company announced that it had entered into an agreement to sell KLOS-FM in Los Angeles, CA to Meruelo Media ("Meruelo Sale"). On June 27, 2019, the Company announced that it had entered into an agreement to sell WABC-AM in New York, NY to Red Apple Media, Inc. ("WABC Sale"). The Meruelo Sale closed on July 15, 2019. The closing of the WABC Sale is subject to various conditions and regulatory approvals which remain pending. The Company expects the WABC Sale to close within the next twelve months.
The major categories of these assets held for sale are as follows (dollars in thousands):

12


 
 
June 30, 2019
 
December 31, 2018
 
 
WABC Sale
 
Meruelo Sale
 
DC Land
 
Total
 
DC Land
Property and equipment, net
 
$
7,054

 
$
516

 
$
80,000

 
$
87,570

 
$
80,000

Broadcast licenses
 
5,738

 
29,205

 

 
34,943

 

Other intangibles, net
 
374

 
566

 

 
940

 

 
 
$
13,166

 
$
30,287

 
$
80,000

 
$
123,453

 
$
80,000


Supplemental Cash Flow Information
    
The following summarizes supplemental cash flow information to be read in conjunction with the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 (Successor Company) and Periods from January 1, 2018 through June 3, 2018 (Predecessor Company), and June 4, 2018 through June 30, 2018 (Successor Company):
 
Successor Company
 
 
Predecessor Company
 
Six Months Ended June 30,
 
Period from June 4, 2018 through June 30,
 
 
Period from January 1, 2018 through June 3,
 
2019
 
2018
 
 
2018
Supplemental disclosures of cash flow information:
 
 
 
 
 
 
Interest paid
$
41,978

 
$
5,878

 
 
$

Income taxes paid
14,134

 
2,847

 
 
1,992

Supplemental disclosures of non-cash flow information:
 
 
 
 
 
 
Trade revenue
$
23,980

 
$
3,297

 
 
$
18,973

Trade expense
22,008

 
3,246

 
 
17,964

Transfer of deposit from escrow - WKQX acquisition

 
4,750

 
 

Supplemental disclosures of non-cash reorganization items impact on changes in assets and liabilities:
 
 
 
 
 
 
Accounts receivable
$

 
$

 
 
$
(11
)
Prepaid expenses and other current assets

 

 
 
21,077

Property and equipment

 

 
 
(121,732
)
Other intangible assets, goodwill and other assets

 

 
 
283,217

Accounts payable, accrued expenses and other liabilities

 

 
 
(36,415
)
Cancellation of 7.75% Senior Notes

 

 
 
(610,000
)
Cancellation of Predecessor Company Term Loan

 

 
 
(1,684,407
)
Issuance of Successor Company Term Loan

 

 
 
1,300,000

Cancellation of Predecessor Company stockholders' equity

 

 
 
649,620

Issuance of Successor Company stockholders' equity

 

 
 
(325,000
)
Reconciliation of cash and cash equivalents and restricted cash to the Condensed Consolidated Balance Sheet:
 
 
 
 
 
 
Cash and cash equivalents
$
20,500

 
$
37,444

 
 
$
50,046

Restricted cash
2,466

 
29,226

 
 
38,305

     Total cash and cash equivalents and restricted cash
$
22,966

 
$
66,670

 
 
$
88,351


13


Adoption of New Accounting Standards

ASU 2016-02 - Leases (“ASU 2016-02”). In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which provides updated guidance for the accounting for leases. This update requires lessees to recognize assets and liabilities for the rights and obligations created by leases with a term longer than one year. Leases will be classified as either financing or operating, thereby impacting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10 - Codification Improvements to Topic 842, Leases ("ASU 2018-10") and ASU 2018-11 - Targeted Improvements ("ASU 2018-11"), which provides technical corrections and clarification to ASU 2016-02. ASU 2016-02 and amendments ASU 2018-10 and ASU 2018-11 will be effective for fiscal years beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted. The standard requires the application of a modified retrospective approach by either applying the lease standard to each lease that existed at the beginning of the earliest comparative period presented in the financial statements, as well as leases that commenced after that date and recognizing a cumulative effect adjustment for leases that commenced prior to the beginning of the earliest comparative period presented, or applying the standard to the leases that commenced as of the beginning of the reporting period in which the entity first applies the leases standard with a cumulative effect adjustment as of that date. The Company adopted this standard on January 1, 2019 and elected the "package of practical expedients" and as a result did not recast existing leases prior to January 1, 2019. The new lease standard also provides as a practical expedient and an accounting policy election, the option to not separate non-lease components from the associated lease components and instead account for each separate lease component and its associated non-lease components as a single lease component. The Company elected this option both for leases under which it is the lessor and for leases under which it is the lessee.

In adopting the new standard, the Company aggregated and evaluated lease arrangements, implemented new controls and processes, and installed a lease accounting system. Adoption of the new standard resulted in recording operating lease right-of-use assets and operating lease liabilities of approximately $156.1 million and $154.5 million on January 1, 2019. See Note 13 Leases for further information.

ASU 2018-07 - Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting (“ASU 2018-07”). The standard aligns the accounting for share-based payment awards issued to employees and non-employees. Changes to the accounting for non-employee awards include: (1) equity-classified share-based payment awards issued to non-employees will now be measured on the grant date, instead of the previous requirement to re-measure the awards through the performance completion date; (2) for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition; and (3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The guidance should be applied to all new awards granted after the date of adoption. In addition, the modified retrospective approach should be used on all liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established by the adoption date by re-measurement at fair value as of the adoption date with a cumulative effect adjustment to opening retained earnings in the fiscal year of adoption. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted ASU 2018-07 as of January 1, 2019 and there was no material impact to the Condensed Consolidated Financial Statements.    
    
Recent Accounting Standards Updates

ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). In June 2016, the FASB issued ASU 2016-13 which requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the potential impact of adopting ASU 2016-13 on its Consolidated Financial Statements.


14


ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, the FASB issued ASU 2018-13, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods therein, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating the potential impact of adopting ASU 2018-13 on its Consolidated Financial Statements.

2. Reorganization Items, Net

In accordance with ASC 852, Reorganization items incurred as a result of the Chapter 11 Cases were presented separately in the Predecessor Company's Condensed Consolidated Statement of Operations prior to the Company's emergence from Chapter 11. For the Predecessor Company periods presented herein, Reorganization items were as follows (in thousands):
 
Predecessor Company
 
Period from April 1, 2018 through June 3, 2018
 
Period from January 1, 2018 through June 3, 2018
Gain on settlement of Liabilities Subject to Compromise (a)
$
726,831

 
$
726,831

Fresh start adjustments (b)
(179,291
)
 
(179,291
)
Professional fees (c)
(29,560
)
 
(54,386
)
Non-cash claims adjustments (d)
(15,364
)
 
(15,364
)
Rejected executory contracts (e)
(2,936
)
 
(5,976
)
Other (f)
(3,312
)
 
(5,613
)
Reorganization Items, net
$
496,368

 
$
466,201


(a) Liabilities Subject to Compromise have been, or will be settled in accordance with the Plan.
(b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting.
(c) Legal, financial advisory and other professional costs directly associated with the reorganization process.
(d) The carrying value of certain claims were adjusted to the estimated value of the claim that were allowed by the Bankruptcy Court.
(e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts.
(f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies.

During the Predecessor Company periods presented herein, the Company made cash payments of approximately $58.4 million for Reorganization items. Costs incurred as a result of the Chapter 11 Cases by the Successor Company subsequent to its emergence from Chapter 11 are classified as restructuring costs within Corporate Expenses in the Successor Company's Condensed Consolidated Statement of Operations.
    
3. Acquisitions and Dispositions
Entercom Asset Exchange
On May 9, 2019, the Company completed its previously announced non-monetary exchange with Entercom ("Entercom Swap"). The Company received WNTR-FM, WXNT- AM, and WZPL-FM in Indianapolis, IN and Entercom received WNSH-FM (New York, NY) and WMAS-FM and WHLL-AM (both in Springfield, MA).
The table below summarizes the preliminary purchase price allocation for the Entercom Swap (dollars in thousands):

15


Assets Acquired
 
 
Broadcast licenses
 
$
22,963

Property and equipment, net
 
1,700

Total assets acquired
 
$
24,663

Assets Disposed
 


Broadcast licenses
 
$
(23,565
)
Property and equipment, net
 
(703
)
Other intangibles
 
(395
)
Total assets disposed
 
$
(24,663
)
Connoisseur Media Asset Exchange
On June 26, 2019, the Company completed its previously announced non-monetary exchange with Connoisseur Media ("Connoisseur Swap"). The Company received WODE-FM, WWYY-FM, WEEX-AM and WTKZ-AM in and around Allentown, PA and Connoisseur Media received WEBE-FM in Westport, CT, and WICC-AM in Bridgeport, CT.
On a preliminary basis, the carrying value of the assets transferred to Connoisseur Media as part of the Connoisseur Swap was approximately $3.7 million. The Company expects the fair value of assets acquired in the Connoisseur Swap will approximate the carrying value of the assets transferred, with any difference accounted for as a gain or loss on the exchange.    
The preliminary purchase price allocation for the Entercom Swap and Connoisseur Swap are based upon the valuation of assets received and the estimates and assumptions used in these valuations are subject to change as the Company obtains additional information during the measurement period, which may be up to one year from the acquisition date. The preliminary and final valuations could be different.
Educational Media Foundation Sale
On May 31, 2019, the Company completed its previously announced sale of six radio stations, WYAY-FM (Atlanta, GA), WPLJ-FM (New York, NY), KFFG-FM (San Francisco, CA), WZAT-FM (Savannah, GA), WXTL-FM (Syracuse, NY), and WRQX-FM (Washington, DC) to Educational Media Foundation for $103.5 million in cash ("EMF Sale"). The Company recorded a gain of $47.6 million on the sale which is included in the (Gain) Loss on Sale or Disposal of Assets or Stations financial statement line item of the Company's Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2019.

4. Revenues

Revenue Recognition

Revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The following table presents revenues disaggregated by revenue source (dollars in thousands):


16


 
Successor Company
 
 
Predecessor Company
 
Three Months Ended June 30, 2019
 
Period from June 4, 2018 through June 30, 2018
 
 
Period from April 1, 2018 through June 3, 2018
Cumulus Radio Station Group
 
 
 
 
 
 
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade)
$
192,163

 
$
67,958

 
 
$
134,477

Non-advertising revenues (tower rental and other)
999

 
399

 
 
616

Total Cumulus Radio Station Group revenue
$
193,162

 
$
68,357

 
 
$
135,093

 
 
 
 
 
 
 
Westwood One
 
 
 
 
 
 
Advertising revenues (broadcast, digital and trade)
$
82,667

 
$
24,986

 
 
$
52,684

Non-advertising revenues (license fees and other)
3,097

 
1,370

 
 
2,240

Total Westwood One revenue
$
85,764

 
$
26,356

 
 
$
54,924

 
 
 
 
 
 
 
Other (1)
$
747

 
$
291

 
 
$
228

Total Revenue
$
279,673

 
$
95,004

 
 
$
190,245



 
Successor Company
 
 
Predecessor Company
 
Six Months Ended June 30, 2019
 
Period from June 4, 2018 through June 30, 2018
 
 
Period from January 1, 2018 through June 3, 2018
Cumulus Radio Station Group
 
 
 
 
 
 
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade)
$
357,859

 
$
67,958

 
 
$
301,804

Non-advertising revenues (tower rental and other)
1,844

 
399

 
 
1,513

Total Cumulus Radio Station Group revenue
$
359,703

 
$
68,357

 
 
$
303,317

 
 
 
 
 
 
 
Westwood One
 
 
 
 
 
 
Advertising revenues (broadcast, digital and trade)
$
178,975

 
$
24,986

 
 
$
143,215

Non-advertising revenues (license fees and other)
7,148

 
1,370

 
 
6,500

Total Westwood One revenue
$
186,123

 
$
26,356

 
 
$
149,715

 
 
 
 
 
 
 
Other (1)
$
1,343

 
$
291

 
 
$
892

Total Revenue
$
547,169

 
$
95,004

 
 
$
453,924


(1) Other is comprised of revenue from certain digital commerce and broadcast software sales and services.





17


Trade and Barter Transactions
The Company provides advertising time in exchange for goods or services such as products, supplies, or services. Trade revenue totaled $10.7 million and $24.0 million for the three and six months ended June 30, 2019 (Successor Company). Trade revenue totaled $3.3 million, $7.7 million and $19.0 million for the period from June 4, 2018 through June 30, 2018 (Successor Company), April 1, 2018 through June 3, 2018 (Predecessor Company) and January 1, 2018 through June 3, 2018 (Predecessor Company), respectively.

Contract Costs
The Company capitalizes certain incremental costs of obtaining contracts with customers which it expects to recover. For contracts with a client whose customer life covers a year or less, the Company uses the practical expedient that allows expensing commissions as they are incurred. For contracts where the new and renewal commission rates are commensurate, management uses the contract life for the amortization period. As such, the Company will continue to expense commissions as incurred for the revenue streams where the new and renewal commission rates are commensurate and the contract life is less than one year. These costs are recorded within Selling, general and administrative expenses. The Company does not apply the practical expedient option to new local revenue contracts, because the commission rates for new and renewal contracts is not commensurate and the customer life is typically in excess of one year. As of June 30, 2019, and December 31, 2018, the Company recorded assets of approximately $7.2 million and $6.5 million related to the unamortized portion of commission expense on new local revenue.

Remaining Performance Obligations
The Company has contracts with customers which the Company believes will produce revenue beyond one year. From these contracts, the Company estimates it will recognize approximately $14.4 million of revenue.

5. Restricted Cash
As of June 30, 2019, and December 31, 2018, the Condensed Consolidated Balance Sheets included approximately $2.5 million in restricted cash. Restricted cash is used primarily to collateralize standby letters of credit for certain leases and insurance policies.

6. Intangible Assets
The following table presents the Company's intangible assets as of June 30, 2019 and December 31, 2018 (dollars in thousands):
    
Intangible Assets:
Indefinite-Lived
 
Definite-Lived
 
Total
Balance as of December 31, 2018
$
956,836

 
$
172,351

 
$
1,129,187

Assets held for sale (See Note 1)
(35,423
)
 
(460
)
 
(35,883
)
Dispositions
(78,582
)
 
(835
)
 
(79,417
)
Acquisitions (See Note 3)
26,129

 
162

 
26,291

Amortization

 
(14,783
)
 
(14,783
)
Other (a)

 
(1,934
)
 
(1,934
)
Balance as of June 30, 2019
$
868,960

 
$
154,501

 
$
1,023,461


(a) Reclassification of leasehold intangibles to right of use assets related to the adoption of ASC 842
        
The Company's indefinite-lived intangible assets consist of broadcasting licenses and trademarks, while the Company's definite-lived intangible assets consist of broadcast advertising and affiliate relationships.

The Company performs impairment testing of its broadcasting licenses annually as of December 31 of each year and on an interim basis if events or circumstances indicate that broadcasting licenses may be impaired. The Company reviews the carrying value of its other intangible assets, primarily trademarks, broadcast advertising and affiliate relationships for recoverability prior to its annual impairment test and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events and circumstances did not necessitate any interim impairment tests during the three and six months ended June 30, 2019.


18



7. Long-Term Debt
The Company’s long-term debt consisted of the following as of June 30, 2019 and December 31, 2018 (dollars in thousands):
 
 
June 30, 2019
 
December 31, 2018
Term Loan
$
590,738

 
$
1,230,299

      Plus: current portion of Term Loan
13,000

 
13,000

Total Term Loan
603,738

 
1,243,299

6.75% Senior Notes
500,000

 

Less: unamortized debt issuance costs
(7,332
)
 

Total 6.75% Senior Notes
492,668

 

Long-term debt, net
$
1,096,406

 
$
1,243,299


Credit Agreement

On the Effective Date, Cumulus Media New Holdings Inc., a Delaware corporation (“Holdings”) and an indirectly wholly-owned subsidiary of the Company, and certain of the Company’s other subsidiaries, entered into the Credit Agreement with the holders of claims with respect to the Predecessor Term Loan under the Canceled Credit Agreement, as term loan lenders. Pursuant to the Credit Agreement, the lenders party thereto were deemed to have provided Holdings and its subsidiaries that are party thereto as co-borrowers with a $1.3 billion senior secured Term Loan.

Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to (i) the London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin of 4.50%, subject to a LIBOR floor of 1.00%, or (ii) the Alternative Base Rate (as defined below) plus an applicable margin of 3.50%, subject to an Alternative Base Rate floor of 2.00%. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. At June 30, 2019, the Term Loan bore interest at a rate of 6.91% per annum.

Amounts outstanding under the Term Loan amortize in equal quarterly installments of 0.25% of the original principal amount of the Term Loan with the balance payable on the maturity date. The maturity date of the Term Loan is May 15, 2022.

The Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to comply with (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use, any one or more of, any material FCC licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in the Credit Agreement). Upon the occurrence of an event of default, the Administrative Agent may, with the consent of, or upon the request of, the required lenders, accelerate the Term Loan and exercise any of its rights as a secured party under the Credit Agreement and the ancillary loan documents provided, that in the case of certain bankruptcy or insolvency events with respect to a borrower, the Term Loan will automatically accelerate.

The Credit Agreement does not contain any financial maintenance covenants. The Credit Agreement provides that Holdings will be permitted to enter into either a revolving credit facility or receivables facility providing commitments of up to $50.0 million, subject to certain conditions (see below).

On May 16, 2019, the Credit Agreement was amended to permit the issuance of indebtedness to the extent the proceeds of such indebtedness are used to refinance all or a portion of the Term Loan, subject to certain conditions as described more fully therein.


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The borrowers may elect, at their option, to prepay amounts outstanding under the Credit Agreement without premium or penalty. The borrowers may be required to make mandatory prepayments of the Term Loan upon the occurrence of specified events as set forth in the Credit Agreement, including upon the sale of certain assets and from Excess Cash Flow (as defined in the Credit Agreement). On October 11, 2018, the Company purchased $50.2 million of face value of the Term Loan for $50.0 million, a discount to par value of 0.40%. On June 5, 2019, with the proceeds from the EMF Sale and cash on hand, the Company made a $115.0 million voluntary prepayment at par on the Term Loan. On June 26, 2019, the Company used the net proceeds from the issuance of the 6.75% Senior Notes (see below) to make a $492.7 million voluntary prepayment at par on the Term Loan. On July 22, 2019, with the proceeds from the KLOS Sale (see Note 16 - Subsequent Events) and cash on hand, the Company made a $50.0 million voluntary prepayment at par on the Term Loan.

Amounts outstanding under the Credit Agreement are guaranteed by Cumulus Media Intermediate Inc. (“Intermediate Holdings”), which is a subsidiary of the Company, and the present and future wholly-owned subsidiaries of Holdings that are not borrowers thereunder, subject to certain exceptions as set forth in the Credit Agreement (the “Guarantors”) and secured by a security interest in substantially all of the assets of Holdings, the subsidiaries of Holdings party to the Credit Agreement as borrowers, and the Guarantors. As of June 30, 2019, the Company was in compliance with all required covenants under the Credit Agreement.

Revolving Credit Agreement

On August 17, 2018, Holdings entered into a $50.0 million revolving credit facility (the “Revolving Credit Facility”) pursuant to a credit agreement (the “Revolving Credit Agreement”), dated as of August 17, 2018, with certain subsidiaries of Holdings as borrowers, Intermediate Holdings as a guarantor, certain lenders, and Deutsche Bank AG New York Branch as a lender and Administrative Agent.

The Revolving Credit Facility matures on August 17, 2023. Availability under the Revolving Credit Facility is generally determined by a borrowing base formula that is based on 85% of the accounts receivable of the borrowers and the guarantors, subject to customary reserves and eligibility criteria. Under the Revolving Credit Facility, up to $10.0 million of availability may be drawn in the form of letters of credit.

Borrowings under the Revolving Credit Facility bear interest, at the option of Holdings, based on (i) LIBOR plus a percentage spread (ranging from 1.25% to 1.75%) based on the average daily excess availability under the Revolving Credit Facility or (ii) the Alternative Base Rate (as defined below) plus a percentage spread (ranging from 0.25% to 0.75%) based on the average daily excess availability under the Revolving Credit Facility. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the federal funds rate plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. In addition, the unused portion of the Revolving Credit Facility is subject to a commitment fee ranging from 0.250% to